Guns R Us overstated its ending inventory in the current year by $5,000. The company incorrectly reported $100,000 of net income. Explain the consequences of this error on the current period's income statement.
A. Cost of goods sold will be too high by $5,000.
B. Cost of goods sold will be too low by $5,000.
C. The correct net income amount should have been $105,000.
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